01 May 2020 | 03.00 pm
Interview: Garry Ferguson, Walkers
'We are starting to see a flow of insolvency questions from our clients'
01 May 2020 | 03.00 pm
Working from home under lockdown has worked out well, says Walkers managing partner Garry Ferguson (pictured)
How has the Covid-19 lockdown affected your office and staff?
Legal services fall within the list of essential services published by government. Our office is open but we are taking a very narrow interpretation of what is essential.
The vast majority have been working from home since mid-March. We have had an agile working policy in place for several years before we adopted a formal policy three years ago. During this time we have set up all senior staff and many others on an ad hoc basis to work from home. Now, the majority of our 150 or so staff in Ireland are enabled to work remotely, leaving three or so who cannot perform their functions remotely; everyone else is plugged in.
Our office had the advantage of learning from the experience of our colleagues in Hong Kong and Singapore who had to deal with the fallout from Covid-19 before it reached Europe. We benefited from very practical advice and were able to prepare from end-February in advance of Irish government announcements.
How have the restrictions impacted on getting work done?
Honestly, I’ve been pleasantly surprised. I say this noting that I’ve always felt we have a dedicated team. My concern on productivity was based on infrastructure, not people.
While many of us had experience of working remotely through our pre-existing agile work policy, many others found themselves logging in from home for the first time. Historically, our systems could be somewhat slow at times but now, from a tech perspective at least, there is very little difference between being online at home and being in the office.
Given our geographic spread, we have been using BlueJeans for calls between offices in Asia, the Americas and Europe for many years, so we were used to remote VC interaction and we have transitioned well to this way of communicating locally.
People are just amazing in terms of their adaptability. So many are plugging away while juggling child care and other commitments and worrying about their elderly parents, yet somehow they are getting through the work.
We have just had a very strong financial quarter (end March is Q3 for us). So far so good but we remain cognisant that we are in for a bumpy ride.
What have you learned from experience so far?
The frequency and tone of communications are important in the best of times. Right now, staying connected and communicating frequently and clearly is vital. People have questions and we need to be honest in our answers. Even if the answer is an uncertain one, given that we do not know what lies ahead in two or three months’ time, we need to treat people like grown-ups and communicate honestly. So far, the message is one of reassurance; there is no need for immediate panic or dramatic announcements.
As to whether there can be increased remote working in the future, I would say yes. It’s too early to predict the extent of any future increase, and while remote working works for some, in truth we have found that many people miss being in an office environment. We will engage with our staff when they return to the office before making policy changes. Flexibility will be key.
How has the crisis affected work in progress and what elements have stalled?
We focus mostly on financial services. The most obvious area that has been impacted is aviation finance. In a typical economic cycle this area is more or less recession-proof, as finance lawyers pivot to restructuring with the support of their insolvency colleagues.
Right now, there is no market for re-possessed aircraft so lenders cannot enforce. The courts have closed for all save emergency scenarios so litigation has also taken a hit. Otherwise, we have continued to see a flow of work to our tax, investment funds, regulatory and FCM teams.
What have your clients primarily been seeking counsel on?
We are starting to see a flow of insolvency questions from our clients, most frequently on examinership — it’s starting to feel like 2007 again in that respect. Last year, we opened an employment unit to cater for clients establishing regulated firms in Ireland as a consequence of Brexit. They are busy with redundancy and other Covid-19 business impact queries.
What legal workthroughs face clients once the lockdown is lifted?
Depending on any emergency measures put in place by governments to assist what were good businesses pre-crisis, we could see a significant flow of work on corporate restructurings and insolvencies. Some areas will move to enforcement mode so litigation will likely increase.
In addition, major market disruption usually presents opportunities for some investors, so we may see an uptick in distressed asset and special opportunity funds. However, we are living in a period of tremendous uncertainty and it’s too early to predict all that lies ahead.
What’s your view on government economic interventions to date?
The overall approach by government has been impressive. They have been measured and they have communicated well, in my view. Right now the priority is on health and the wellbeing of the most vulnerable in our society, and that is clearly as it should be. In this area the government have been measured and reassuring in the most difficult of circumstances.
In terms of economic interventions, the scale of investment has been unprecedented but unfortunately more will likely be needed. Employer subsidies and a relaxing of tax collection dates have been helpful but businesses need cash right now, so government will need to find a way for that to happen quickly.
Some commentators have said that the government interventions may end up reaching 10% or more of GDP. This is conjecture for economists rather than lawyers, but if true it’s breath-taking.
How do you think the pandemic will affect FDI?
Again, we are in crystal ball territory here. If we are dealing in facts and what we know right now, we can say that Ireland is extremely well established as a location for FDI. We have an ecosystem of employees, legal and taxation systems and infrastructure that is not easy to replicate.
Assuming that the global enterprises that have established here survive the next six to 12 months, there is plenty of reason to be optimistic that Ireland will benefit from a recovery. It has been observed that the economy is in hibernation — if this is true, all of the features that made Ireland a success before Covid-19 should remain in place when the world emerges from this enforced dormancy period.